Google et al respond to Paul Allen with Motions to Dismiss, Sever - A Whole Lot of Shakin' Goin' On

Sunday, October 24 2010 @ 11:57 PM EDT

All month there has been a flurry of activity on the part of the defendants in Paul Allen's patent infringement litigation, Interval Licensing v. AOL, et al, against Google, Apple, Yahoo! and pretty much everyone else you can think of -- mostly all the companies have been busy getting lawyered up. I see Yahoo! has added Morrison & Foerster's Michael A. Jacobs to its legal team, so I am getting quite excited about what we may get to watch.

But maybe not. Google/YouTube have filed a motion to dismiss for failure to state a claim and a motion to dismiss or sever. And others are joining Google in complaining to the court that Interval's complaint fails to state a claim. These patents are so broadly drawn, so generic, Google tells the court, they could be read to cover Google's entire business. I'd say they cover everybody on the Internet, actually, personally. Does Paul Allen think he invented the Internet now?

At the same time, the patents are so vague, Google says, it's impossible to know what product or service is allegedly infringing. And that doesn't meet the legal requirements for a viable complaint.

Worse, Interval has lumped 11 defendants together. What does Google have in common with Office Depot? Clearly there is no commonality of action, no plot, no plan, no nothing. How can they all have infringed the same vague patents, when their businesses are so different, and they do nothing together? What precisely do these patents do, and what precisely do the defendants do that infringes these patents?

Responding to previous criticism, Allen's spokesman called Interval Research “an early, ground-breaking contributor to the development of the internet economy," saying it "worked hard to bring its technologies to market through spinning off new companies, technology transfer arrangements, and sales of its patented technology.”

I see. It contributed to the "internet economy" by selling off its patents? Please give us a list of technologies it itself brought to market. Thanks.

I have the docket for you, and all the motions. I'll put each motion number in parentheses as I discuss them, and you can drop down to the docket to get the PDF, if you want to read them for yourself. Sound like a plan?

Google's Motion On Failure to State a Claim Upon Which Relief Can Be Granted (#64):

Google/YouTube's first motion (#62, renoted as #64 to add the date to respond) says Interval's complaint should be dismissed for failure to state a claim:

Interval’s Complaint fails to identify with any particularity: (a) how Google has allegedly
infringed the patents-in-suit; (b) the underlying technology at issue; or (c) products or services
offered by Google that are alleged to infringe. Instead, Interval’s Complaint makes identical
conclusory allegations with respect to all eleven named Defendants, despite the disparate and
unrelated nature of their respective businesses. These uninformative and non-specific allegations
are repeated verbatim from one Defendant to the next, without alleging any facts that are specific
to any Defendant’s business or products.

Google goes on to tell the court that the patents are so broadly written as to be not only generic, but universal, readable as essentially covering Google's entire business. For example, Google writes that for its ’507 patent, Interval alleges infringement liability “by making and using
websites, hardware, and software to categorize, compare, and display segments of a body of
information as claimed in the patent.”

Huh? Did Interval patent the entire Internet? Who doesn't this apply to?

And as for the '682 patent, Interval claims
infringement “by making and using
websites and associated hardware and software to provide alerts that information is of current
interest to a user as claimed in the patent.” Worse, Interval makes no distinction between the disparate defendants, who are alleged identically to have infringed, but who have varied services and products. So what exactly is the infringing product or service in each entity's case?

Citing both
Twombly and Iqbal, Google says there's no way to identify what exactly the allegation is:

Interval’s Complaint fails to state a claim for infringement under the Supreme Court’s
threshold requirements because its allegations are so bereft of factual content that the Court
cannot draw any inferences, let alone a reasonable one, that Google infringes the patents-in-suit.
By failing to identify with specificity the products or services that allegedly infringe the patents-in-suit and how they do so, the Complaint offers no more than “unadorned, the-defendant-unlawfully-harmed-me” allegations that fall far short of the Iqbal standard....

Further, in order to shortcut its Complaint against all Defendants by relying on only three
basic allegations, Interval necessarily fails to specify products unique to Google. Interval
accuses the following of infringement:

“websites, hardware, and software” (D.I. 1, at ¶¶ 24, 30);

“websites and associated hardware and software” (Id. at ¶¶ 49, 55); or

“products that display information” (Id. at ¶¶ 35, 41.)

Such generalizations of a wide universe of alleged infringement evince only mere speculation on
the part of Interval as to what category of products or services might somehow infringe, and
provide no notice of the products at issue....

Accusing both hardware and software of infringement fails to identify even in the
broadest terms what specific Google products and/or services are alleged to infringe....

In addition, Interval must specify not only the products or services that allegedly infringe,
but also how those products or services meet the claim limitations of the patents-in-suit.

Hey, forget Iqbal for a minute, Google goes on. Interval doesn't even meet the requirements of Form 18 of the Federal Rules of Civil
Procedure, the lower standard that used to prevail before Iqbal raised the bar. Even Form 18 requires some specific product listed as allegedly infringing. That link takes you to the forms, and if you click on 18, choosing either WP or rtf format, you'll find a template form, and you are supposed to follow its wording, filling in the blanks and substituting your own information for the red text parts. For example, here are the two sentences Google is talking about:

2. On Date, United States Letters Patent No. __________________ were issued to the plaintiff for an invention in an electric motor. The plaintiff owned the patent throughout the period of the defendant's infringing acts and still owns the patent.

3. The defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.

Google quotes a 2010 case,
Sharafabadi v. Pacific
Northwest Farmers Co-op, which says that nowadays, post-Iqbal, to state a "plausible" claim, you must provide more than Form 18's requirements, at least
“a brief description of what the patent at issue does” and “an allegation that certain named
and specially identified products or product components also do what the patent does.”

Interval also fails to plead indirect infringement, Google says, because you can't, not unless there's first a sufficient claim of direct infringement. AOL adds (#90) in its motion that direct infringement is a predicate to any claim of indirect infringement, plus a claim of indirect infringement requires that the infringer know about the patent at the time of its alleged infringement, and these defendants still don't know what Interval is talking about. That can't be fixed, later, Google says, by telling them now. They had to have known *then*:

Moreover, to the extent
Interval attempts to allege that Google induces or contributes to another’s infringement by way
of an unspecified encouragement to customers, Interval also fails to state a claim upon which
relief may be granted. A claim for indirect infringement requires, at a minimum, knowledge of
the patent-in-suit at the time of the allegedly infringing activities. Mallinckrodt Inc. v. E-Z-Em
Inc., 670 F. Supp. 2d 349, 354-55 (D. Del. 2009). Further, “knowledge after filing of the present
action is not sufficient for pleading the requisite knowledge for indirect infringement.” Xpoint
Techs., Inc. v. Microsoft Corp., 09-cv-628, 2010 WL 3187025, at *6 (D. Del. Aug. 12, 2010)
(citing Mallinckrodt, 670 F. Supp. 2d at 354 n.1). The Complaint contains no such allegations of
knowledge; therefore, it cannot support a claim for indirect infringement.

OfficeMax filed a misjoinder motion too (#74), relying on Google/YouTube's motion, on its own behalf. That means it relies on the same authorities cited by Google, the same arguments, plus any of its own. Ditto Apple (#80), which puts it this way:

In short, Interval has sued eleven major corporations and made the same bald assertions that
each defendant infringes 197 claims in four patents. As the U.S. Supreme Court noted in
Twombly, it is in this type of situation in which courts should use their “power to insist
upon some specificity in pleading before allowing a potentially massive factual controversy
to proceed.” 550 U.S. at 558 (quotation omitted).

In the interest of expeditiously disposing of this case, Apple hereby joins in
Google’s motion and incorporates by reference the authority and arguments presented
therein. Accordingly, based on that authority and those arguments as well as the analysis in
this motion, Apple requests that the Court dismiss Interval’s Complaint against Apple.

Apple expressly reserves the right to file its own brief in reply to any opposition
filed by Interval.

There is a joint motion (#82) by eBay, NetFlix, Office Depot, and Staples also claiming that Interval fails to state a claim against them, also relying on Google's motion, one sentence long:

Sharing a lawyer and brief filings means one of two things, generally. Either they hope to save money, or they are so confident that Google has said it all, there's no need to repeat it.

Yahoo! has filed its own motion (#84) on failure to state a claim:

PLEASE TAKE NOTICE that defendant Yahoo! Inc. joins in defendants Google
Inc. and YouTube, LLC’s motion to dismiss for failure to state a claim upon which relief
can be granted pursuant to Fed. R. Civ. P. 12(b)(6) (Docket Entry No. 64), for all the
reasons therein.

Additionally, Yahoo! notes that Interval Licensing’s infringement allegations are so vague
that Yahoo! cannot implement an appropriate document hold notice. Based on Interval’s
complaint, Yahoo! cannot identify which of its products and services may be relevant to the
lawsuit. (Declaration of Kevin Kramer in Support of Yahoo!’s Notice of Joinder in Motion
to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted Pursuant To
Fed. R. Civ. P. 12(b)(6) (“Kramer Decl.”) ¶ 2-3.)) Yahoo! has hundreds of products and
services, the vast majority of which involve websites, hardware, and/or software. (Kramer
Decl. ¶ 4.) The complaint’s lack of specificity leaves Yahoo! in the dark as to what activity
allegedly infringes, and thus which documents need to be preserved. (Id.)

Counsel for
Yahoo! wrote a letter to counsel for Interval Licensing on October 6, 2010, asking for
additional information as to which Yahoo! products and services are alleged to infringe the
asserted patents, but has not yet received a response. (Kramer Decl. ¶¶ 6-7.) Thus, Yahoo!
has been unable to issue an adequate litigation hold notice to ensure that its employees
preserve the appropriate documents.

That last really tweaks Interval's nose. It has to realize that this failure to respond to Yahoo's request for info, sent early in October, can impact discovery, because Yahoo will just say, Sorry, we didn't know you'd want that. Too late now. It's gone. So either Interval stands up and tells what it's alleging, or it's likely to run a hobbled race against Yahoo. In addition to local counsel and Michael Jacobs, Morrison & Foerster have assigned four other attorneys to this case. I gather they intend to prevail.

The Kramer declaration (#85) states the details about the letter, which is attached as an exhibit. Kramer is VP and Associate General Counsel at Yahoo! in charge of patent litigation. He tells about sending the letter and getting no reply.

Facebook has also filed a motion (#92) to dismiss for failure to state a claim against it, also relying on Google's motion. It adds its own material, however. The claims are so vague, Facebook writes, that it can show the court the entire claim against it in one footnote:

1
The full text of the allegations against Facebook in the Interval complaint are as follows:
“Defendant Facebook has infringed and continues to infringe one or more claims of the ’682
patent. Facebook is liable for infringing the ‘682 patent under 35 U.S.C. § 271 by making and
using websites and associated hardware and software to provide alerts that information is of
current interest to a user as claimed in the patent.” (Id. at ¶ 48.)

One or more. OK. When will we know?

Apple has additionally filed a motion (#81) asking the court to sever claims against it, or to dismiss them, as has Google (#63, renoted as #65), as has Yahoo (#86), as has AOL (#90) as has Facebook (#91), as has the eBay group (#83).

Google's Motion to Dismiss or Sever (#65):

This Google motion says Interval Licensing shouldn't be allowed to sue so many unrelated entities, 11 of them, when there's no evidence that there is any connection between them or any coordinated action by them or "any right to relief from the same transaction, occurrence, or series of transactions or occurrences":

Interval Licensing LLC (“Interval”) has ignored the Federal Rules of Civil Procedure and
Ninth Circuit law by attempting to improperly join eleven disparate and unrelated entities in a
single action for patent infringement without alleging any coordinated action between them or
any right to relief that arises out of “the same transaction, occurrence, or series of transactions or
occurrences.” Fed. R. Civ. P. 20(a)(2)(A). Google should be dropped from the instant action, or
the claims against it should be severed, because there is no allegation of, or any factual basis for
alleging, a connection between Google and the other defendants with respect to Interval’s claims
of patent infringement.

One header states that "Plaintiff’s Attempted Joinder of Google with Unrelated Defendants Ignores
the Law," and that section cites Rule 20 of the Federal Rules of Civil Procedure which says there has to be some commonality between the defendants, and here there just isn't any:

Rule 20 of the Federal Rules of Civil Procedure defines who may be permissively joined
as defendants. Joinder is appropriate only if:

(A) any right to relief is asserted against them jointly, severally, or in the
alternative with respect to or arising out of the same transaction, occurrence,
or series of transactions or occurrences; and

(B) any question of law or fact common to all defendants will arise in the action. ...

The defendants named in the Complaint either compete with each other, as in the case of,
for example, Google and Yahoo!, or have entirely different businesses, as in the case of, for
example, Google and Office Depot, Inc.
The eleven named defendants offer a wide and
unrelated array of products, technologies, and services, from notepads and office furniture to
Internet search capabilities. There is no logical relationship between the defendants, and the
Complaint contains no allegation that any two defendants (let alone all eleven defendants)
conspired to injure Interval, or acted in concert in any way whatsoever. Interval has
inappropriately sued all defendants at once apparently to serve its own interests.

You think?

Google means, I believe, that it is cheaper for Interval to sue the eleven defendants all at once as a group than to have to sue them individually and separately all over the place and have to pay for discovery and everything else that goes into a patent infringement lawsuit for each and every one of them serially:

In order to prove infringement, Interval must show that each and every limitation of the
asserted claims is present in each asserted product or service. Read Corp. v. Portec, Inc., 970
F.2d 816, 821 (Fed. Cir. 1992). While it is impossible to tell from the Complaint which products
or services Interval contends infringe its patents, both infringement and remedies analyses are
intensely fact-specific processes. Joinder is improper here because each (as yet unknown)
product or service accused of infringement will be subjected to its own, independent
infringement analysis and damages evaluation, involving different evidence and witnesses.
Spread Spectrum, 2010 WL 3516106 at *2 (in a patent infringement action, finding improper
joinder under Rule 20 and severing claims pursuant to Rule 21 where “[t]he accused infringing
software, other evidence and witnesses are all different and unique” as to defendants).

Imagine the prejudice from asking the jury to parse all the claims out, if they are all presented at once.

"Where a party has been misjoined," Google writes, "Fed. R. Civ. P. 21 provides that '[on] motion or on its
own, the court may at any time, on just terms, add or drop a party'.” Hence, Google's motion. It wants to be dropped or its case, and YouTube's, severed from the others, preferably the former:

Google should be dismissed from this case, or the claims against it should be
severed, because a jury would become confused by a proceeding involving a multitude of
unrelated products, infringement theories, and defenses. This likelihood of confusion and
prejudice is precisely the reason why Rule 20 requires “transactional relatedness” for joinder of
unrelated defendants.

Again, Apple has also filed a similar motion (#81), but with one exception in a footnote:

Further, there will be no substantial right that will be prejudiced by severance. To
the contrary, severance will avoid prejudicing Apple and other defendants from having to
litigate disparate allegations, evidence, accused products, arguments, and theories.

In the interest of expeditiously disposing of or managing this case, Apple hereby
joins in Google’s motion and incorporates by reference the authority and arguments
presented therein.2 Accordingly, based on that authority and those arguments as well as the
analysis in this motion, Apple requests that the Court dismiss or sever Apple from this case.
Notwithstanding any decision on this motion, Apple expressly reserves its right
under Rule 20(b), Rule 42(b), the Court’s inherent authority, and/or any other source of law
to move for a separate trial.

Apple expressly reserves the right to file its own brief in reply to any opposition
filed by Interval.

______________2
Apple does not join the first sentence of footnote 2 in Google’s motion. (Docket No. 63 at 6:26.)

Here's Google's footnote 2 Apple is standing off from:

2
Google would not object to any re-filed cases being heard in this Court in order to realize certain judicial
efficiencies. Further, other tools, such as coordination or consolidation of discovery, particularly, for example as it
relates to claim construction and/or validity of the patents-in-suit, may be employed to preserve judicial efficiency
and party resources.

Apple doesn't intend to agree to that first sentence, meaning it *does* object, but whether it objects to "this court" or "refiled cases" is not yet clear to me. Maybe both.

What puzzles me is this: surely Interval thought of all this. Everyone knows about Iqbal. Yet they filed this complaint the way they did. Why? They have to have some plan or some strategy, I would think, unless I overestimate them. We'll see when they reply, and they surely will have to.

Here's the the docket so far, to give you the overview, and relevant documents link to the PDFs, the new ones starting with #62:

Notice of Deficiency
Docket Text: NOTICE to Filer: In the future please order the parties on the docket as they appear on the Complaint. In addition to creating a docket that is a true reflection of the Complaint caption it also helps eliminate dropping parties as happened here with defendant Google, Inc. The docket has now been properly ordered and defendant Google, Inc. has been added.(MKB)

-

Filed & Entered: 08/30/2010

Notice of Deficiency
Docket Text: NOTICE to Filer of Deficiency: Pursuant to our local rules, Civil Rule 3(a), all civil action complaints in which jurisdiction is invoked in whole or in part under 28 U.S.C. § 1338 (regarding patents, trademarks and copyrights) shall be accompanied by the required notice to the Patent and Trademark Office (Form AO120) or the required notice to the Register of Copyrights (Form AO121). Please complete the appropriate form and email it back to the new cases box at newcases.seattle@wawd.uscourts.gov. Please include in the subject line the name and number of the case and the name of the document attached. This form will then be posted to the case docket and a copy sent to the appropriate entity. (MKB)

Order on Application for Leave to Appear Pro Hac Vice
Docket Text: ORDER re [30] Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Kevin X. McGann for Google Inc, and for YouTube LLC, by William M. McCool. (No document associated with this docket entry, text only.)(DS)

35

Filed & Entered: 10/04/2010

Order on Application for Leave to Appear Pro Hac Vice
Docket Text: ORDER re [31] Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Warren S. Heit for Google Inc, and for YouTube LLC, by William M. McCool. (No document associated with this docket entry, text only.)(DS)

36

Filed & Entered: 10/04/2010

Order on Application for Leave to Appear Pro Hac Vice
Docket Text: ORDER re [32] Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney John Handy for Google Inc, and for YouTube LLC, by William M. McCool. (No document associated with this docket entry, text only.)(DS)

37

Filed & Entered: 10/04/2010

Order on Application for Leave to Appear Pro Hac Vice
Docket Text: ORDER re [33] Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Dimitrios T. Drivas for Google Inc, and for YouTube LLC, by William M. McCool. (No document associated with this docket entry, text only.)(DS)

Order on Application for Leave to Appear Pro Hac Vice
Docket Text: ORDER re [59] Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney George A Riley for Apple Inc, by William M. McCool. (No document associated with this docket entry, text only.)(DS)

Notice of Joinder
Docket Text: NOTICE of Joinder JOINING [62] MOTION to Dismiss For Failure to State Claim Upon Which Relief can be Granted Pursuant to Fed. R. Civ. P. 12(B)(6), by Defendant OfficeMax Inc. (Attachments: # (1) Proposed Order Granting Defendant OfficeMax's Joinder in Defendants Google Inc. and YouTube, LLC's Motion to Dismiss for Failure to State a Claim upon Which Relief Can Be Granted)(Baumgardner, Kevin)

Order on Motion to Withdraw as Attorney
Docket Text: ORDER on [79] Agreed Motion for Withdrawal of Attorney Edward J Bennett and Michael D Hunsinger as Counsel for deft Office Depot Inc by Judge Marsha J. Pechman.(TF)